Canadian small business owners have one thing in common when it comes to cash-flow: uncertainty

Nearly 2 in 3 (64%) Canadian small businesses have had cash flow issues.

Cash flow is the lifeblood of success – small businesses and self-employed entrepreneurs rely on the ability to pay current expenses and forecast correctly to enable the ongoing growth and success of their business.

To shine a light on the impact this has on small business owners and the self-employed, and to better understand how the small business community can combat these issues, we commissioned a survey to unpack the state of small business cash flow. Here’s what we found.

The State of Small Business Cash Flow in Canada

The negative impact that cash flow can have on small businesses is profound. On average, small business owners in Canada are losing $28,885 by foregoing a project or sales specifically due to issues created by insufficient cash flow. That’s enough to staff a part-time employee for a year, or a sizeable down payment on a delivery vehicle.

More importantly, the lost projects or sales take a toll on a company’s bottom line. More than 2 in 5 (41%) of Canadian small business owners’ companies have lost $10,000 or more by foregoing a project or sales specifically due to issues created by insufficient cash flow.

The inability to pay vendors, loans or employees damages the very relationships that small businesses and the self-employed rely on to succeed. Among those small business owners who have had cash flow issues, nearly a third (33%) have been unable to either pay vendors, pay loans, or pay themselves or employees (29%).

What’s Driving Cash Flow Problems for the Self-Employed and Small Businesses

Nearly 2 in 5 (37%) Canadians estimate it takes more than 30 days to get paid, for example, by customers, clients, vendors or banks, and a quarter estimate their company currently has more than $20,000 in outstanding receivables. For many small businesses and the self-employed that struggle with cash flow, the problem isn’t that they don’t have funds in the pipeline – it’s that they don’t have the funds when they need them for real-time expenses.

What’s most concerning is that even if they’re paid on time, more than 3 in 5 (62%) small business owners in Canada report that the time it takes the money to process after receiving a payment has the largest impact on their company’s cash flow compared to not getting paid by customers or clients within the terms of the payment system (38%).

Intuit Helps Small Businesses and the Self-Employed Keep on Top of Cash Flow

Understanding the pressures and difficulties that small businesses and the self-employed face when it comes to cash flow, QuickBooks is committed to removing unnecessary friction, delivering new features that help businesses get money as soon as possible, keep money in their pockets longer and get access to money when they need a cash infusion.

QuickBooks Online is built to fuel small business success and simplifies bookkeeping so that every time an invoice is sent, a customer makes a payment, or an employee gets paid, the information is tracked and updated – providing small business owners with the vital information and insights they need, when they need them. To read more about recent product updates we have announced, visit the product innovation post.

Every day small businesses inspire us by creating the products and experiences we love – whether it’s the cup of coffee that makes our day, helping us transform our house into a home or capturing memories from the most important life events.

Key Findings: The State of Small Business Cash Flow

Global Issue: The study surveyed 3,000 small business in the U.S., UK, Australia, Canada and India and found that the majority of small businesses around the world (61%) struggle with cash flow.

Recent Status: More than a third (34%) of Canadian small business owners’ companies that have experienced cash flow issues in the last 12 months, and 67% have been kept up at night by concerns about cash flow, even if their company has never experienced issues.

Cash Flow Woes: Among those small business owners who have had cash flow issues, nearly a third (33%) have been unable to either pay vendors, pay loans, or pay themselves or employees (29%).

Big Losses: On average, small business owners in Canada are losing $28,885 by foregoing a project or sales specifically due to issues created by insufficient cash flow.

Not Cashing In: More than 2 in 5 (41%) of Canadian small business owners’ companies have lost $10,000 or more by foregoing a project or sales specifically due to issues created by insufficient cash flow.

Key Numbers: A quarter (25%) of small business owners in Canada estimate their company currently has more than $20,000 in outstanding receivables.

Survey Methodology:

The Intuit Survey was conducted by Wakefield Research (www.wakefieldresearch.com) among 500 Small Business Owners at companies of 0-100 employees between October 5 and October 19, 2018, using an email invitation and an online survey.

Results of any sample are subject to sampling variation. The magnitude of the variation is measurable and is affected by the number of interviews and the level of the percentages expressing the results.

For the interviews conducted in this study, the chances are 95 in 100 that a survey result does not vary, plus or minus, by more than 4.4 percentage points from the result that would be obtained if interviews had been conducted with all persons in the universe represented by the sample

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.